Daksha Pankaj Valia vs State Bank Of India
- CitationComp. App. (AT) (Ins) No. 1447 of 2024
Ratio decidendi
The rule this decision rests on
An adjudicating authority that hears neither the resolution professional nor the applicant before deciding an application under Section 94 of the Insolvency and Bankruptcy Code, 2016 acts in breach of the principles of natural justice, and an order so passed is liable to be set aside and the application remitted for fresh consideration. Where the record of the impugned order recites that a party was heard when the order reserving the matter shows that party was absent, the erroneous recital does not cure the want of hearing; the discrepancy between the two records is itself a sufficient ground for setting aside the order.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
State Bank of India & Ors. ...Respondent(s) Present: For Appellant : Mr. Rajesh Bohra, Ms. Sangeeta Bohra, Advocates For Respondents : Mr. Harshit Khare, Mr. Prafful Saini, Advocates for SBI. With Comp. App. (AT) (Ins) No. 1448 of 2024
IN THE MATTER OF:
Ila Bharat Valia Personal Guarantor to API ...Appellant(s) Industries Pvt. Ltd.
Versus
State Bank of India & Ors. ...Respondent(s) Present: For Appellant : Mr. Rajesh Bohra, Ms. Sangeeta Bohra, Advocates For Respondents : Mr. Harshit Khare, Mr. Prafful Saini, Advocates for SBI. With Comp. App. (AT) (Ins) No. 1482 of 2024
IN THE MATTER OF:
Bhushan Pankaj Valia, Personal Guarantor to UIC ...Appellant(s) Corporation Pvt. Ltd. & Ors.
Versus
State Bank of India & Ors. ...Respondent(s) Present: For Appellant : Mr. Rajesh Bohra, Ms. Sangeeta Bohra, Advocates For Respondents : Mr. Harshit Khare, Mr. Prafful Saini, Advocates for SBI. -2-
With Comp. App. (AT) (Ins) No. 1538 of 2024
IN THE MATTER OF:
State Bank of India ...Appellant(s)
Versus
Ila Bharat Valia ...Respondent(s) (Personal Guarantor) & Ors. Present: For Appellant : Mr. Harshit Khare, Mr. Prafful Saini, Advocates for SBI. For Respondents : Mr. Rajesh Bohra, Ms. Sangeeta Bohra, Advocates With Comp. App. (AT) (Ins) No. 1540 of 2024
IN THE MATTER OF:
State Bank of India ...Appellant(s)
Versus
Daksha Pankaj Valia ...Respondent(s) (Personal Guarantor) & Ors. Present: For Appellant : Mr. Harshit Khare, Mr. Prafful Saini, Advocates for SBI. For Respondents : Mr. Rajesh Bohra, Ms. Sangeeta Bohra, Advocates With Comp. App. (AT) (Ins) No. 1541 of 2024
IN THE MATTER OF:
State Bank of India ...Appellant(s)
Versus
Bhushan Pankaj Valia ...Respondent(s) (Personal Guarantor) & Ors. Present: For Appellant : Mr. Harshit Khare, Mr. Prafful Saini, Advocates for SBI. For Respondents : Mr. Rajesh Bohra, Ms. Sangeeta Bohra, Advocates -3-
ORDER
(Hybrid Mode) 16.08.2024: These six appeals have been filed against the order of the
same date passed in three different applications filed under Section 94 of
the IBC for initiating CIRP against the personal guarantor of the appellant in
Company Appeal (AT) (Ins) No. 1447 of 2024, 1448 of 2024 and 1482 of
2024. The Adjudicating Authority by the impugned order has rejected
Section 94 application as barred by time.
2. The State Bank of India has filed three appeals challenging the same
very orders passed in above three appeals. It is sufficient to notice the fact in
Company Appeal (AT) (Ins) No. 1447 of 2024 for deciding all the three
appeals filed by the personal guarantor. Ld. Counsel for the Appellant
submit that Section 94 application was filed by the Personal guarantor
appellant in which application was dated 19.11.2021.
3. It is submitted that after the submission of the report first hearing
took place before the Adjudicating Authority on 19.04.2024 on which date
following order was passed:
"Resolution Professional is observed to be sitting in car and arguing the matter online which is not permitted and she is treated as absent. None present for Personal guarantor. Though fresh notice is served upon all Financial Creditors only State Bank of India appeared. None present for Central Bank of India, Union Bank of India, hence, they are proceeded ex-parte. Heard Ld. Counsel for the State Bank of India.
Order is reserved".
Comp. App. (AT) (Ins) Nos. 1447, 1448,1482, 1538, 1540,1541 of 2024 -4-
4. It is submitted that no one had appeared for the personal guarantors
on the said date and Resolution Professional also could not reach in the
court, only State Bank of India has appeared and no body appeared for
other two Banks but Adjudicating Authority reserved the orders.
5. Ld. Counsel for the Appellant submit that in the impugned order the
adjudicating authority in para 6 made the following observation:
"6. We have heard the learned Counsel for applicant and respondent no.1 and perused the documents on record. We have also gone through the report dated 10.12.2021 filed by the RP".
6. It is submitted by the Counsel for the Appellant that Applicant was
not present which is noticed in the reserving order but in the impugned
order it has been observed that Applicant is present.
7. It is submitted that the order was passed by the Adjudicating
Authority in absence of the appellant and the fact that the appellant could
not appear on the date is noted in the order when the order was reserved.
8. It is submitted that RP has recommended for admission of the
application. Adjudicating Authority neither heard the RP nor the Applicant.
9. At this stage, we may also notice the CA (AT) (Ins) No. 1540 of 2024
filed by the State Bank of India challenging the same order.
Comp. App. (AT) (Ins) Nos. 1447, 1448,1482, 1538, 1540,1541 of 2024 -5-
10. From the impugned order passed by Adjudicating Authority as well as
the order reserving the application under Section 94 it is clear that neither
the Resolution Professional was heard nor the Applicant personal
guarantors were heard and it was wrongly recorded in paragraph 6 that
applicant was heard.
11. Above is the sufficient reason to set aside the impugned order and
remit the application for consideration before the Adjudicating Authority.
The State Bank of India having also filed the appeal against the same order
in the said appeal, in view of the setting aside of the order no orders are
required in the appeal of the State Bank of India. We, however, make it clear
that we are not expressing any opinion or any of the contentions raised by
either of the parties and both the parties are at liberty to make all
submissions before the Adjudicating Authority in support of their
contentions.
12. Mr. Khare, Ld. Counsel appearing for State Bank of India submit that
there are subsequent events including the issuance of recovery certificates.
We are of the view that all these issues are to be placed before the
Adjudicating Authority for consideration.
13. Considering the aforesaid we allow the CA (AT) (Ins) Nos. 1447 of
2024, 1448 of 2024, 1482 of 2024. In result of allowing of those appeals no
orders are required in CA (AT) (Ins) Nos. 1538 of 2024, 1540 of 2024 and
1541 of 2024.
Comp. App. (AT) (Ins) Nos. 1447, 1448,1482, 1538, 1540,1541 of 2024 -6-
14. All the appeals are disposed of accordingly.
[Justice Ashok Bhushan] Chairperson
[Arun Baroka] Member (Technical)
sr/nn
Comp. App. (AT) (Ins) Nos. 1447, 1448,1482, 1538, 1540,1541 of 2024
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